Should Premium Inventory Be Sold In The Open RTB Market?

“The Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Brian Brownie, director of advertising operations at eBay North America.

Programmatic, like many things in life, is an exercise in trial and error for most US publishers. Those with exceptional scale and a high-quality environment, backed by in-depth consumer insight, quickly became key sources of inventory for the exchange world. Growth was tremendous and the control was an operator’s dream. Soon, these publishers became accustomed to the fluid nature of the programmatic buying frenzy and unleashed the systems into all their standard IAB ad sizes.

But, as usual, when things seem too good to be true, it’s often because they are. While the floor rates and auction competition yielded high eCPMs, they distracted from the one key piece of the equation: selling. Where these publishers were once able to deliver a highly targeted impression to a consumer with a great degree of relevancy, the situation started to decay with the allure of automation. Brands that once coveted direct relationships now found themselves torn between an insertion-order commitment and the chance at efficiency in the form of lower prices and fluid spending. This, coupled with RFPs for banners drying up, signaled a radical change in the ecosystem.

Programmatic’s allure may be hard for marketers to resist, but buying large swaths of faceless inventory in the hope of hitting the target audience and getting performance at a low price may not deliver the kind of returns buyers are hoping for.

A Dwindling Connection To Consumers

Publishers and marketers collide when publishers start buying “users” rather than content or context. Publishers sense incremental value and try to capitalize on the machines recognizing cookies. The marketer seamlessly deploys a campaign where a machine will look for the optimal performance at the lowest prices possible. This can quickly leave marketers with undesirable nonviewable inventory, and leaves the publisher with undervalued ad experiences.

For some, this development was damaging. Instead of mandating that their knowledge of the consumer be front and center in the buy-side decision to bid against an impression, they left the machines to their own devices, leaving the critical element of firsthand knowledge of users out of the equation. Publishers watched machines outbid each other in hopes of winning an impression based on what they understood about the user, not what the publishers knew about them. Many retargeting budgets preyed on the inventory made available to the open market, diluting the once-exclusive brand connection to a consumer.

Put Premium Inventory Where it Belongs

A connection to quality, programmatically delivered, is where the industry should be headed. Publishers should consider making the drastic shift of removing premium inventory from open-market buying. Most publishers within the comScore top 200 have unique and valuable experiences to offer their users.

Now put your user hat on and consider brand validation – as a user, you’re constantly assessing environment and material. Is it aesthetically pleasing? Should I move into this neighborhood? Is this website a good use of my time?

By creating an advertising experience shaped solely by the highest bid – delivering ads based on cookie relevance but not necessarily contextual significance – you run the risk of tarnishing the user’s perception of the experience. Delivering the right brand to a consumer when they’re in the shopping mind set is paramount in setting the tone for their experience with you.

Elevating premium inventory to gain viewable, fraud-free impressions at reasonable prices is great for both buyer and seller. The publisher has more control and visibility about the brands shaping their key consumer experiences. Advertisers have the peace of mind that they are getting value and targeting against viewed-by-human impressions. This symbiotic relationship is a good model for continued business, especially as programmatic delivery advances.

So I ask you: As a publisher, what have you learned through programmatic trial and error? And, how are you treating your premium inventory and the sale of your environment?